National Stock Exchange of India Ltd (NSE) has filed its draft red herring prospectus (DRHP) for an initial public offering that will be an entirely offer-for-sale (OFS), allowing existing shareholders to sell up to 148.9 million shares. As per the latest filing, NSE will not receive any proceeds from the issue, marking a significant departure from traditional IPO structures. Based on an estimated unlisted valuation of around ₹5 lakh crore, the IPO size could be close to ₹30,000 crore, potentially making it the largest public issue in India's history, surpassing Hyundai Motor India's ₹27,000 crore IPO in 2024. According to The Economic Times, NSE's P/E multiple works out to be around 49, representing a substantial discount to BSE's P/E of nearly 67. This valuation reflects muted growth in NSE's core operations compared to BSE's strong performance trajectory. NSE shares are likely to be priced at ₹1,800 to ₹2,040, with the exchange valued at over ₹5 lakh crore at the higher end, while BSE's market capitalization on June 19 stood above ₹1.64 lakh crore. The IPO is currently at the DRHP stage with SEBI approval pending, after which the price band, lot size, and subscription dates will be officially announced.
Despite having significantly fewer listed companies, NSE has outperformed BSE across most major operating and trading metrics. According to the DRHP filing, BSE has 5,955 companies listed exclusively on its platform as of FY26, nearly double NSE's 2,978 listed companies. However, BSE has a significantly higher concentration of microcap companies than NSE, which makes the gap in listed company count appear larger. Most mid-cap and large-cap stocks are listed on both exchanges, with the number of actively traded stocks on BSE estimated at around 4,000. NSE's average daily trading volume (ADTV) in the cash market stood at ₹1.06 lakh crore in FY26, sharply higher from BSE's ₹79,500 crore, according to the DRHP. NSE maintained a market share of 92.99% in cash market turnover compared with BSE's 7%, with both exchanges delivering cash market turnover CAGR of 14% and 11% respectively between FY21 and FY26. NSE commanded 99.79% of industry turnover in equity futures with turnover of ₹393.82 lakh crore, while in equity options segment, NSE held a 74.71% share of industry premium turnover reporting premium turnover of ₹142.42 lakh crore. NSE's options market share has slipped as competition from BSE intensifies, highlighting the intensifying competition in derivatives trading.
The financial results highlight the stark contrast between the two exchanges. NSE reported total income of ₹18,713 crore and profit after tax of ₹10,302 crore during FY26, while BSE reported total income of ₹4,834 crore and profit after tax of ₹2,487 crore. NSE's revenue from operations fell 3% year-on-year to ₹16,601 crore in 2025-26 from ₹17,141 crore in FY25 as trading activity weakened across cash, equity futures and options segments, with net profit declining 15% year-on-year to ₹10,302 crore due to lower transaction charges, weaker trading activity, and regulatory tightening in derivatives. BSE reported an 88% jump in profit to ₹2,487 crore in FY26, benefiting from derivatives reforms that affected NSE more significantly. Transaction charges remained the largest contributor to earnings for both exchanges, with NSE earning ₹13,057 crore from transaction charges during FY26, while BSE generated ₹3,795 crore. NSE's operating EBITDA margin stood at 66.9%, marginally higher than BSE's 64%, while PAT margin came in at 51% compared with 48% for BSE. NSE's assets under management (AUM) linked to Nifty indices reached ₹8.14 lakh crore in FY26, more than three times the ₹2.5 lakh crore linked to BSE indices, reflecting the growing dominance of Nifty-linked exchange-traded funds and index funds among domestic and foreign investors.
Despite revenue from operations falling 3% year-on-year to ₹16,601 crore in 2025-26 from ₹17,141 crore in FY25 as trading activity weakened across cash, equity futures and options segments, NSE's technology spending rose dramatically by 28.6% to ₹1,315 crore in FY26 from ₹1,022 crore a year ago. Technology expenses now account for 7.9% of operating revenue in FY26, up from 5.3% two years ago, representing 22% of NSE's total expenses of ₹5,999.9 crore. The sharpest increase came from repairs and maintenance expenses, which rose 72.7% to ₹315 crore in FY26, attributed to higher hardware and software maintenance costs, segregation of technology infrastructure across group entities and accounting changes following the divestment of NSEIT. Software expenses also increased 27.3% to ₹363 crore, driven by additional third-party software licences and higher outsourcing costs for infrastructure maintenance. EBITDA margins also moderated to 67% in FY26, reflecting the impact of increased technology investments. Market experts view NSE's technology spending as strategic infrastructure investment rather than short-term profit pressure.
Despite the current valuation discount, demand for the NSE IPO is likely to be exceptionally strong given the appetite for capital market-related businesses, with experts noting that investors with a one-to-two-year horizon likely to get several chances to accumulate quality stocks over the next few months. The IPO represents roughly 6% of NSE's post-offer equity share capital, with notable sellers including State Bank of India offering up to 2.475 crore shares and other major financial institutions participating in the offering, along with global investors like the Canada Pension Plan Investment Board. Vedant Gupte, co-founder and chief executive of wealthtech platform Trackk, emphasized that "NSE today operates more like a technology company than a traditional exchange. Its ability to process massive trading volumes, maintain high resilience and continuously upgrade infrastructure is becoming a key competitive advantage." Prasenjit Paul, fund manager at 129 Wealth and research analyst at Paul Asset, noted that "an exchange is actually a technology business at its core, so continuous investment in infrastructure, cybersecurity, disaster recovery and system capacity is not optional; it is a necessity." As of March 31, 2026, NSE was the world's largest derivatives exchange by contracts traded for the seventh consecutive year, according to the World Federation of Exchanges (WFE), accounting for 11.38% of global cash equity trades and 51.18% of global equity derivatives contracts traded, highlighting its growing significance in global capital markets.
